## Facts

- Indiana Glass Company, a large industrial electricity customer, purchased electric service from Indiana Michigan Power Company under a written service agreement.
- Indiana Glass alleged that voltage fluctuations in I&M’s electrical service disrupted its manufacturing operations and caused economic losses.
- Indiana Glass sued asserting breach of warranty under Indiana’s UCC and sought damages, including its litigation attorney’s fees as incidental or consequential damages.
- The trial court granted partial summary judgment for Indiana Glass on breach, but granted partial summary judgment for I&M on attorney’s fees because the contract lacked a fee-shifting clause and Indiana Code § 26-1-2-715 did not authorize such fees.
- Indiana Glass appealed solely on the denial of attorney’s fees.

## Issues

1. Whether a prevailing buyer in a UCC breach-of-warranty action may recover litigation attorney’s fees as “incidental” or “consequential” damages under Indiana Code § 26-1-2-715 when the contract contains no attorney-fee provision and no separate statute or exception applies.

## Decision

- The Indiana Court of Appeals affirmed the trial court’s summary judgment for I&M on the attorney’s-fees issue.
- The court held that litigation attorney’s fees incurred to prosecute the breach-of-warranty claim are not recoverable as incidental or consequential damages under Indiana Code § 26-1-2-715.
- The court relied on Indiana’s American Rule and its prior interpretation of materially identical UCC language in Landmark Motors v. Chrysler Credit Corp.

## Legal Principles

- Indiana follows the American Rule: each party pays its own attorney’s fees unless a statute, contract, or recognized common-law exception authorizes fee shifting.
- Indiana Code § 26-1-2-715 permits recovery of commercially related incidental and consequential damages caused by breach, but it does not include attorney’s fees incurred in litigation.
- General UCC damages language will not be read to displace the American Rule without clear legislative direction or an express contractual fee provision.

## Conclusion

The court refused to treat litigation attorney’s fees as incidental or consequential damages under Indiana’s UCC, holding that fee shifting requires explicit statutory or contractual authorization (or a recognized exception), and affirmed judgment denying Indiana Glass recovery of its attorney’s fees.


Indiana Glass Co. v. Ind. Mich. Power Co., 692 N.E.2d 886 (Ind. Ct. App. 1998)